The "Secret Sauce" For CEOsBy David Wexler
Having worked with a number of highly talented and successful CEO's over the past 30 years, I can with comfort assert that there are many ways for CEOs to successfully lead a business.
That said, there is one thing that I've observed those CEOs who have been most successful over the long term do that I believe is the secret sauce for CEOs who are committed to longer term profitable growth and shareholder value creation, and that is to build a high degree of organizational trust.
I define organizational trust as that intangible aspect of a corporate culture that causes employees throughout the organization to cut the leadership team some slack when leaders err, and to stay the course and stay committed to the organization and its leaders.
How often have we observed situations where a CEO makes a mistake, or a member of the executive team, or leadership at whatever level of the organization, and the knives come out?
Members of the Board, the CEO, peers, and/or employees at all levels of the organization begin to complain. The leader's decisions are questioned. Work is asked to be re-done. Subtle and not so subtle signs of disrespect and borderline insubordination emerge. Relationships chill. Access to people, information, and team forums diminishes. Ultimately, one way or another, the leader or leaders end up having to exit the organization.
Contrast this with some highly publicized mis-steps in companies that may make the wrong call on the market's appetite for a change in product formulation; product features; and/or pricing. These companies are often times able to recover owing to brand image, loyalty, and strong cash flow.
I will argue though that where their leaders survive is due more often than not to the trust and goodwill that they have built with their stakeholders.
How then to build organizational trust? The CEOs whom I've observed be successful at this do the following:
1. Communicate a vision, mission, strategic goals, and most importantly, what your expectations are of employees in achieving success.
2. Meet with and update employees and other stakeholders as to progress, regularly, openly, and honestly. Speak to what is going right, as well as what is going wrong.
3. Maintain an open door providing access to employees; provide forums for obtaining feedback and listen attentively to what employees have to say.
4. Slay sacred cows. In every organization there are long-standing issues that aren't attended to. Most employees know what these are but often times leaders fail to demonstrate courage in dealing with these. It may be a rogue unit head or a poisonous key employee; it may be a skewed compensation program that favors some at the expense of others; it may be a product unit or office location that has long ago ceased to make economic sense. Whatever these are, by addressing them, you send a powerful message to employees and build tremendous organizational trust.
5. Celebrate successes. There will be many along the way, both big and small, and it is important to mark these milestones to achieving success.
6. Credentialize the leadership team by having trusted (by the employees) third parties come in to speak to how the company is helping them to be successful. These can be key customers; key partners; and/or owners.
7. Be considerate and worthy of your employees. All roads to success lead through employee engagement and contributions. Leaders should validate the leaders who report into them since employees most trust their first line supervisor and respect most, leaders who respect their leader.
8. Most importantly, deliver wins. You don't have to win every battle and in fact will miss targets in some quarters and on some strategies. But, you have to win in terms of the overall strategy and be able to show that you are progressing towards delivering on the mission and strategic plan.
Employee engagement surveys often times hide the true picture of the level of organizational trust in a company. I have seen survey scores that indicated all was well, when in fact employee turnover was on the verge of becoming catastrophic and morale was down all over. And, while it is also true that I have yet to find nirvana in any company, and we all as employees will always find something to complain about, we don't need perfection in a company to be successful.
Just a high degree of organizational trust, and that is not only readily attainable, but the secret sauce for successful CEOs.
The former global head of human resources for Alias Systems, David Wexler has had HR and operational leadership roles at companies such as CPP Investment Board, Midland Walwyn, Digital Equipment, and Procter & Gamble. His experience spans lifecycle HR; the people related aspects of mergers, acquisitions, and divestitures, and building winning organizations. You can reach him at david.wexler@hotmail.com.
This is an excellent article Les, thanks for re-posting it here.
ReplyDeleteA few thoughts:
When we identify these key ingredients for building a successful and resilient company, I think it's important to simply communicate them. Make it clear for instance, that one of your primary goals is to build a company with a high degree of organizational trust. Then, lay out a plan for how you're going to do it, and set the standard yourself for what you expect of others.
The steps laid out in this article are an excellent framework for creating an organization built on trust. In the end, the most powerful strategic advantages arise from management or organizational innovations. They lie in the ability to consistently harness the passion, intelligence, and creativity of every one of your team members – all the time. You can't do that without trust.